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Updated for the spring homebuying season - homebuyer mortgage assistance programs by state

Underwater after a bankruptcy 3.5 years ago. Can I refinance?

Q: Can I find someone to refinance? We filed bankruptcy 3.5 years ago after a failed business. We were never late and never missed a payment on our mortgages (1st & 2nd) or our cars and did not include these in the filing. Since the filing we have paid off one of the two cars. We have an adjustable rate first mortgage that is set to adjust in 2013 - currently it is at about 6%. The second mortgage is fixed at 9.9%. Looking at both mortgages, we are slightly under water. Since the filing we have not taken out any credit at all. Is there any hope of re-financing?

A: The bad news is that the combination of your issues - being underwater and having a fairly recent bankruptcy - means finding new financing will be next to impossible. Fannie and Freddie require "credit recovery" periods after bankruptcy of up to four years, and being underwater leaves fewer options outside of a Home Affordable Refinance -- available only if your loan is owned by Fannie or Freddie in the first place. You can check with your existing first mortgage lender to see if help might be available, but it does seem unlikely at the present moment.

More help from HSH.com

  • Can we do a "cash-in" refinance?

  • How do I remove or add a name to a home loan?

    In general, the only way to remove a name from your mortgage will be to refinance or pay off the debt. This is also true when trying to add names to the mortgage. Lenders will not add nor remove names from such an obligation without the opportunity to ensure that the other borrowers have the ability to pay.
  • I'm an inexperienced refinancer. What can I expect?

    Q: I owe 56,000 on my eleven year old variable rate mortgage at 8%.I have good credit, have been in my home for 11 years and want a 15-year fixed-rate mortgage. While I have a good income, I have no cash for closing costs. Do I need to pay points and fees? Do I need an appraisal? What can I expect when I approach the bank for a refinance?A: If your credit is good and you have equity in your home, you should be able to refinance to a 15-year fixed rate. Lenders will require an appraisal of the property, but you should be able to build the cost of refinancing into the loan amount, or might be able to trade it off in exchange for a slightly higher-than-market interest rate. As the bank about your loan options, and expect that you'll need to fully document your income, debts and assets.
  • I'm trying to refinance a jumbo loan.

  • Is there a ten year refinance mortgage out there?

    Almost any lender that offers a fixed-rate mortgage will offer a 10-year mortgage. Mortgage rates for a 10-year mortgage usually aren't any better than the rates offered for a 15-year mortgage. That said, be sure to shop around to find a competitive rate. Getting a fixed-rate mortgage with a term as short as 10 years will save you a lot of money on interest costs.

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